Childcare can be a significant cost for many working families. In order to help ease some of the financial pressure of sending children to childcare for eligible families the Australian Government introduced the Child Care Subsidy.
If you’re currently in the process of shortlisting childcare providers or even enrolling your child in childcare, you might also be wondering whether you’re eligible for the Child Care Subsidy and how much you could potentially receive. With so many different factors influencing the Child Care Subsidy rates, we’re here to help you navigate the system and work out how much you could be eligible for.
What is the Child Care Subsidy?
The Child Care Subsidy, or CCS for short, is the largest form of childcare assistance in Australia. Funded by the Federal Government, this subsidy replaced the Childcare Rebate in July 2018 and is intended to assist families with the cost of childcare. The CCS claiming process is managed by Centrelink.
The CCS is paid by the government directly to the childcare provider. As a result, eligible families then benefit from reduced childcare fees by covering the difference between the total cost of childcare and the subsidy amount covered by the government. Ultimately, families who receive the CCS can enjoy less out-of-pocket expenses when it comes to childcare.
Am I eligible for the Child Care Subsidy?
Before we get into the CCS rates and how much you could receive, it’s important to first figure out whether or not you’re eligible for the CCS.
To receive the CCS, you must meet the following criteria:
- Care for a child 13 or younger who's not attending secondary school, unless an exemption applies,
- Use an approved childcare service,
- Be responsible for paying the childcare fees, and
- Meet residency and immunisation requirements.
If you’re still unsure whether or not you qualify for childcare assistance, you can read more about the eligibility requirements on the Services Australia website.
How much can I save with the Child Care Subsidy?
The amount of CCS you can receive depends on a number of factors. To work out how much CCS you’re eligible for, you’ll be assessed on:
- Your family’s income,
- The hourly rate cap based on the type of approved childcare you use and your child’s age,
- The hours of activity you and your partner do, and
- The number of children in your care.
The CCS rates are adjusted each year in July based on the Consumer Price Index (CPI) for December of the previous year. As of 10 July 2023, the following rates apply.
Your family’s income
The amount of CCS your family is eligible for depends on your family’s combined annual income. It’s also worth noting that Centrelink will withhold 5% of your subsidy to avoid potential overpayment. At the end of every financial year, Centrelink will balance your payment based on your taxable income. Depending on whether you’ve overpaid or underpaid, you’ll either have to pay back the amount owning or Centrelink will reimburse the outstanding amount to you directly.
| CCS family income thresholds | Subsidy % |
| Up to $80,000 | 90% |
| Over $80,000 and less than $530,000 | Decreasing from 90% Subsidy gradually decreases by 1% for every $5,000 of family income. |
| $530,000 or more | 0% |
Hourly rate cap
The hourly rate cap differs depending on the type of approved childcare that you use and the age of your child. The current maximum rates are as follows:
| Service type | New hourly rate cap (children below school age) | New hourly rate cap (school-aged children) |
| Centre Based Day Care | $12.74 | $11.15 |
| Outside School Hours Care | $12.74 | $11.15 |
| Family Day Care | $11.80 | $11.80 |
| In-Home Care (per family) | $34.64 | $34.64 |
Your activity level
The CCS rates are also affected by your activity level, which is based on the hours of recognised activities that you do. If you have a partner, their activity level will also be taken into account. There are a number of different activities that are deemed as ‘recognised activities’ from paid employment to an unpaid internship and even undertaking education or study. The Services Australia website has more detailed information about what constitutes a recognised activity.
This is used to work out how many hours of subsidised childcare you’re entitled to each fortnight. This is then split into four activity levels as follows:
| Activity level each fortnight | Hours of subsidised care each fortnight |
| Less than 8 hours | 0 hours if you earn above $72,466 24 hours if you earn $72,466 or below |
| More than 8 to 16 hours | 36 hours |
| More than 16 to 48 hours | 72 hours |
| More than 48 hours | 100 hours |
If you don’t meet the activity test but you have a preschool-aged child attending an early educational program (such as a preschool or kindergarten program) at a Centre Based Day Care service, you may be able to access 36 hours of subsidised care per fortnight.
From 10 July 2023, families can get at least 36 hours of subsidised care per fortnight for each Aboriginal and/or Torres Strait Islander child in their care and attending childcare. Families may be eligible to receive more than 36 hours of subsidy per fortnight based on their circumstances and the amount of recognised activity they do.
The number of children in your care
Lastly, you may be eligible to receive a higher CCS rate if you care for more than one child aged five or under. To receive a higher subsidy rate, you must:
- Get or be eligible for CCS,
- Earn a combined family income of less than $362,408,
- Have more than one CCS-eligible child aged five or younger, and
- Be using childcare for your higher-rate child or children.
If you do have more than one child under five in your care, Centrelink will assess which children will receive the higher subsidy by working out the ‘standard rate child’ and the ‘higher rate child or children’. More often than not the standard rate child is the eldest, so they’ll continue to attract the standard subsidy rate based on your family’s circumstances. In some instances, the higher rate child or children can receive a 30% higher CCS rate. If your family earns a combined family income of $362,408 or more you won’t be eligible for the higher CCS rate.
Higher CCS rates
CCS family income thresholds | Subsidy % |
| $0 to $138,118 | 95% |
| More than $138,118 to below $183,118 | Decreasing from 95% Subsidy gradually decreases by 1% for every $3,000 of family income. |
| $183,118 to below $262,408 | 80% |
| $262,408 to below $352,408 | Decreasing from 80% Subsidy gradually decreases by 1% for every $3,000 of family income. |
| $352,408 to below $362,408 | 50% |
| $362,408 or more | Higher CCS rates no longer apply, all children in the family will receive the standard CCS rate |
With so many different factors influencing the CCS rate, it can be difficult to determine just how much you may be entitled to. If you want to get a better indicator of exactly how much you’re entitled to, you can use the Care for Kids Child Care Subsidy calculator to work out how much your family could claim while estimating the out-of-pocket childcare cost. This calculator takes less than a minute to complete and can give you a good idea of how much childcare could set you back.
We understand that it can be difficult to navigate childcare, particularly when it comes to the cost and potential payments you might be eligible to receive. To learn more about the cost of childcare, explore our collection of blogs dedicated to unpacking childcare fees and assistance.
